Letter to the Editor

Jun. 17, 2012 - 02:17PM
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In defense of DCAA Regarding the June 11 editorial, “DCAA must balance quality and quantity — and soon,” you neglected to consider important points that would give a more accurate picture of the Defense Contract Audit Agency’s effectiveness and productivity.

To use the number of audits completed as your basis for evaluation isn’t valid for two reasons. First, you imply that our performance standard should be the number of audits DCAA was completing at the time it was criticized by the Government Accountability Office. This just isn’t where our agency needs to be. Second, doing more audits does not automatically result in more savings. In reality, the amount of net savings is one of the most tangible benefits of our audit work.

Choosing the right audits and doing them comprehensively is more effective and beneficial than simply completing more audits. For example, in fiscal 2003, we examined $265 billion, questioned $8 billion (3 percent) of costs and issued over 29,000 audit reports. In fiscal 2011, we examined $128 billion, questioned $11.9 billion (9 percent) of costs and issued about 7,000 reports. Although we issued about 75 percent fewer audit reports and examined fewer dollars, we questioned more costs on a percentage basis.

It’s also important to note that contracting officers are continuing to uphold a majority of these questioned costs. And in fiscal 2011, our agency produced net savings of $3.5 billion — the highest amount in 10 years.

We achieved these results by using a risk-based approach, which allows for the best use of our resources on audits with the highest return for our efforts. We made tough choices about where to put limited resources, and we consciously decided to focus on higher payback audits. While this was the right decision, it resulted in a large backlog of incurred-cost audits. We know there is a sizable incurred-cost workload ahead of us, and we are executing a plan to eliminate the backlog as quickly as possible while still addressing the taxpayer’s interest. We are making good progress.

I’m also aware of the need for our audits to be timely, and I am committed to doing everything we can to ensure that our audits don’t take one day more than they should.

But the editorial calls us out for being “thorough to a fault.” I respectfully disagree. The Defense Department, war fighter and taxpayer expect nothing less than for their auditors to vigorously protect their interest. I am proud to say that is exactly what our workforce is doing.